Mayday - Arthur Hayes

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Reading https://cryptohayes.substack.com/p/mayday

TLDR :cherry_blossom:

This article discusses the recent market downturn in crypto and the underlying factors that are driving a slow but steady increase in fiat liquidity, which could lead to a gradual recovery in crypto prices.

Key Points :dizzy:

  • The recent market downturn was expected due to factors like US tax season, Fed policy, and the Bitcoin halving.
  • The Fed is reducing the pace of quantitative tightening, effectively adding more liquidity to the markets.
  • The US Treasury is increasing short-term debt issuance, which drains liquidity from the system and could lead to higher long-term rates.
  • The bailout of Republic First Bank by the FDIC effectively guarantees all deposits in the US banking system, adding trillions in contingent liabilities to the Fed’s balance sheet.
  • The author is bullish on Bitcoin, Ethereum, and high-beta altcoins like Solana and Dogecoin.

In-depth Summary :open_book:

The author, Arthur Hayes, discusses the recent “mayday” in the crypto markets, where prices plummeted due to a combination of factors, including US tax season, Fed policy, and the Bitcoin halving. He notes that the “tourists” have fled the market, but the “hard motherfuckers” will continue to hold and accumulate their favorite crypto assets.

Hayes then delves into the underlying factors that are driving a slow but steady increase in fiat liquidity, which could lead to a gradual recovery in crypto prices. He highlights the Fed’s decision to taper the pace of quantitative tightening, effectively adding more liquidity to the markets. He also discusses the US Treasury’s decision to increase short-term debt issuance, which drains liquidity from the system and could lead to higher long-term rates.

The author also discusses the bailout of Republic First Bank by the FDIC, which effectively guarantees all deposits in the US banking system. This move adds trillions in contingent liabilities to the Fed’s balance sheet, which will likely be funded through money printing.

Overall, the author is bullish on Bitcoin, Ethereum, and high-beta altcoins like Solana and Dogecoin, and believes that the recent market downturn provides an excellent opportunity to accumulate these assets.

ELI5 :child:

The crypto markets have been going through a rough patch, but the author thinks things are going to get better soon. The government and the Fed are doing things that will add more money to the system, which should help crypto prices go up over time. The author is especially excited about Bitcoin, Ethereum, and some other popular crypto coins, and thinks now is a good time to buy them.

Writer’s Main Point :star2:

The writer’s main point is that the recent market downturn in crypto was expected, but that underlying factors like the Fed’s policy changes and the government’s actions are creating a slow but steady increase in fiat liquidity, which could lead to a gradual recovery in crypto prices. The author is bullish on Bitcoin, Ethereum, and high-beta altcoins, and believes that the current market conditions provide an excellent opportunity to accumulate these assets.